Shedding Light on the Dark Side of Firm Lobbying

Companies spend a substantial amount on lobbying — devoting financial resources on teams of lobbyists to further their interests among regulatory stakeholders. According to the Government of Canada, the Office of the Commissioner of Lobbying of Canada spent $4.8 million on lobbying in 2020.

Extant research has demonstrated positive returns on lobbying investment, with some evidence that these returns can be even higher than returns on investment from activities such as R&D. However, there is a dearth of understanding about customer outcomes of lobbying. Are there any customer implications of firm lobbying investments?

Dr. Sandeep Arora, Assistant Professor of Marketing at the Asper School of Business, and co-authors Gautham Vadakkepatt, Kelly Martin, and Neeru Paharia, examine this question and discuss the unintended customer consequences of lobbying in their study entitled “Shedding Light on the Dark Side of Firm Lobbying: A Customer Perspective.”

With significant public policy implications, this study was recently published in the American Marketing Association’s Journal of Marketing, an internationally renowned scholarly journal that disseminates knowledge about real-world marketing questions to scholars, educators, managers, policy makers, consumers, and other societal stakeholders around the world.

In their study, co-authors Vadakkepatt, Arora, Martin, and Paharia emphasize the importance of considering the customer effects of lobbying on firms.

“Our investigation sheds light on a critical dark side and reveals that the firm’s focus on customers may be diminished when it also lobbies. Firm focus can be reoriented to customers, but doing so requires intentional, marketing-focused efforts. We highlight those efforts and explain their implications in the full study.”

A social media post by the Journal of Marketing noted that the co-authored study is the first to examine the customer effects of firm lobbying – a valuable endorsement from the respected publication that has the reputation of publishing only the most impactful, thought-leading, substantive research in the marketing discipline.

Dr. Arora, an F. Ross Johnson Fellow and Head of the Department of Marketing at the Asper School of Business, commented on the Journal of Marketing’s status as a premier marketing journal with significant impact on academia, practice, and policy. “Its reputation of trust and its widespread reach and impact make it a very valuable avenue for the publication of our research,” said Arora.

This is Dr. Arora’s second study published in the Journal of Marketing. His previous work entitled, “The Implications of Offering Free Versions for the Performance of Paid Mobile Apps,” which he co-authored with Frenkel ter Hofstede and Vijay Mahajan, was published by the Journal in 2017.

Asper Staff